2000 (3) TMI 799 - AT - Central Excise

Summary

Issues:
Classification of the product "Himgange Ayurvedic Oil" under the Central Excise Tariff Act.

Analysis:
The party classified their product as Ayurvedic Medicine under chapter sub-heading 3003.30, claiming exemption under Notification No. 8/94. However, the Assistant Commissioner reclassified it as 'perfumed hair oil' under chapter sub-heading 3305.10, leading to a demand for recovery of a substantial amount.

The Commissioner (Appeals) allowed the party's appeal based on a certificate from the U.P. Govt. Ayurvedic & Unani Directorate and an opinion from the Chief Chemist C.R.C.L., New Delhi, suggesting the product could be considered a medicament.

The Collector (Allahabad) appealed, arguing that the product's classification should not solely rely on the issued certificate or drug license and highlighted conflicting test reports regarding the product's nature as either "perfumed hair oil" or "medicament."

The appellate tribunal emphasized that the classification should be based on the product's characteristics, manufacturing process, and ingredients, not just on promotional material or labels. It was noted that the product's name "Himgange" did not correspond to any recognized Ayurvedic medicine.

The tribunal considered the Chief Chemist's report, which highlighted the product's therapeutic effects and advised its consideration as a medicament due to its natural perfumery materials. The tribunal also referenced legal precedents and emphasized the need to establish the product's actual use for hair care to determine its correct classification.

Ultimately, the tribunal set aside the previous order and remanded the matter for fresh adjudication by the Assistant Commissioner to consider all relevant evidence, including the nature of product use, test reports, and classification headings claimed by both parties.